If there’s one thing monopolists hate, it’s competition. That’s probably why the U.S. government shut down Liberty Reserve yesterday, charging seven men with laundering $6 billion for over one million clients. Calling Liberty Reserve a “bank of choice for criminals,” the feds won’t be satisfied until they destroy every currency that competes with the U.S. dollar.

That’s because the Federal Reserve is actually the largest money laundering operation of all. It routinely creates trillions of dollars in counterfeit currency for it’s favorite mob banksters like Goldman Sachs and JP Morgan. Disguised with labels like “banker bailouts” or “economic stimulus programs,” these handouts of fiat currency debase all the other dollars held by everyone else. It’s the greatest financial swindle in history, making Bernie Madoff look like an amateur.

OMG, the currency was used by criminals? Say it isn’t so!

Maintaining monopoly control over the money supply, however, means destroying the competition. Liberty Reserve was starting to look like competition, so it had to be taken out. The investigation involved 17 countries, and the P.R. propaganda campaign has the entire mainstream media characterizing Liberty Reserve as some sort of money laundering scheme when, in reality, it was just a private electronic currency.

For example, the Washington Post said that Liberty Reserve catered to “…drug traffickers, child pornographers and others in the criminal underworld…”

Um, you mean similar to the way CASH is used by drug traffickers, child pornographers and the criminal underworld? If a currency is to be blamed for all its uses by criminal elements, then no currency is more covered in blood, cocaine, sex slavery and evil deeds than the U.S. dollar — simply because it’s the most-used currency on the planet. Is the Washington Post surprised that criminals use currencies or something?

Blaming Liberty Reserve for the actions of criminals is sort of like blaming the manufacturers of duct tape for all the kidnappings that take place around the world. Gee, duct tape is used by evil people to bind the hands of kidnapping victims? Raid the company! Shut down the duct tape! Duct tape is bad!

What’s clear from this shutting down of Liberty Reserve, by the way, is that the world’s financial monopolists aren’t going to tolerate competition. Their goal is to shut down all competing currencies, and the next target on their list may be bitcoin.

The problem with bringing down bitcoin is figuring out whose doors to kick in

There’s just one problem with that whole plan: Whose doors do you kick in? Bitcoin isn’t run by one company. It’s a decentralized currency, and there’s no one company that handles the transactions.

Transactions are calculated by a distributed network of “miners” who trade computing power for bitcoins in order to keep the electronic ledger of the entire system humming. What this means for the feds is that even if they have unlimited manpower to conduct raids on bitcoin, there’s no way to figure out who to raid at gunpoint.

That’s what government does best, of course: Shove guns in people’s faces in order to protect the monopoly interests of powerful corporations or industries… the banking industry, in this case. But the prerequisite to shoving guns in people’s faces is knowing whose faces to shove them into. On that point, bitcoin provides no easy targets.

If no one in the mainstream really accepts bitcoin (like Amazon.com), then the currency is relegated to little more than the dark alleys of the internet: black market deals, porn, video game credits and so on. It might ultimately make a great currency exchange for things like MMORPG in-game currencies, but bitcoin is unlikely to gain any real traction in the real world.

After all, the world’s most popular bitcoin exchange — MT GOX — was originally named based on the game, “Magic the Gathering Online Xchange.” (Most people don’t know that and are shocked to learn it.)

Could a better decentralized currency be created?

However, none of this means another decentralized currency couldn’t someday be created that offers both price stability and peer-to-peer decentralization. Thanks to the laws of economics, however, currency prices will never be stable unless the supply of the currency is allowed to grow.

A finite supply of any given currency sounds great on paper, but in the real world a currency needs to gradually expand along with the overall size of the economy it serves. Bitcoin can never do that because it is mathematically limited to a predetermined supply, but a future electronic currency might somehow be adaptable enough to smooth the peaks and valleys.

Many other currency experiments are already floating around the ‘net: Litecoin, Ripple, SolidCoin, PPcoin and so on. Most of these alternative currencies have centralized clearinghouses, meaning they will eventually be raided at gunpoint and shut down. Only peer-to-peer currencies have any hope of surviving the mob raids of monopolistic governments.

Your best currency? Ammo

For the record, after observing world events over the last few years, I’ve come to the conclusion that there is no better currency than ammo. I’m not kidding: .223, 22LR, .308 and 7.62×39 can always be traded for almost anything else of value. Of course, you can’t go lugging ammo around in your pockets all day long, which is why government fiat currencies become the convenient standard for exchanging goods and services in society.

But when those currencies fail — and a global financial failure is now inevitable — you’ll want to make sure you own something else that holds practical value. Ammunition seems to be unbeatable in this realm, proving itself to be even more valuable than gold. (You can’t defend your gold by throwing gold at approaching enemies, after all…)

And the worse the situation gets in the world, the more valuable ammo becomes. Maybe that’s why Americans are right now buying up every scrap of ammo they can lay their hands on. The average shelf life of a case of 9mm pistol ammo in the United States is about five minutes.

In terms of other currencies, gold and silver are always a solid back-up plan, and they’re relatively easy to buy and sell. But in a harsh collapse, gold is worthless. You’ll have much better luck trading Bic lighters, cigarettes and coffee than gold coins. Stock up now while you can. Amazon.com sells cases of Bic lighters that are dirt cheap today, yet invaluable in a market crash economy. (Don’t buy cheap Bic knock-offs. They LEAK out all their fuel and become worthless pieces of plastic. I know this from firsthand experience. Only Bic lighters hold their fuel.)

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